EUROPE POKER LAW INDEX

Hungary Poker Laws

Hungary has had organized gambling for over two hundred years, although for almost all of this period it had been limited pretty much to lottery draws, until the fall of communism permitted the Gambling Act of 1991 to be passed, which among other things, created a large state run gambling company called Szerencsejatek Zrt, which oversees not only the lottery but several other forms of games of chance, and also owns an interest in several Hungarian casinos.

Unlike the setup in several other European countries, this state run gambling company does not enjoy a monopoly on gambling in general, in spite of what some people think, although they do enjoy a monopoly on certain forms of gambling, such as draw games and sports betting. Overall, Szerencsejatek has about a 50% share of the gambling market in Hungary, which is substantial but far from a general monopoly. (1)

Szerencsejatek Zrt does offer players access to its services online as well, although this is limited to the forms of gambling that it oversees and does not include either casino or poker games. The only “official” (and we use that term loosely given the laws here) would be rooms like PPI Poker (see below) or 888 Poker – who accept players from most countries throughout Europe.

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As far as live poker goes, Hungary used to have a fairly thriving live poker club scene not that long ago, and some players even moved to Hungary from other countries to play at them, but while this was permitted by the government and still is, due to a very high tax rate of 30%, most of the poker clubs are said to have been taxed out of existence and could not remain profitable enough under these conditions.

There are still opportunities to play live poker in Hungary, and 4 of the countries’ 7 land based casinos offer it, although there is only a total of 10 operating poker tables in the country right now, so the action is pretty limited to say the least. (2)

So this leaves online poker as the major poker venue in the country, something that is fairly common these days anyway given the popularity and accessibility of online poker, and there are quite a few Hungarians that play online poker regularly in spite of their not being any regulated Hungarian online poker sites.

Hungary’s Attempts To Regulate Online Poker and Online Gambling

Hungary appears to be quite eager to see regulated online gambling emerge in their country and has played around with various schemes over the last few years, and actually did pass legislation allowing this in 2013. (3)

However, online gaming sites didn’t exactly line up for this, and it is said that the regulatory scheme isn’t particularly appealing to operators, due to steep licensing fees and high tax rates.

The original licensing fee came in at a little less than half a million dollars a year, which the larger operators could probably easily afford to pay, but this certainly ended up shutting out the small to mid size operators, and the larger operators simply weren’t interested in any of this. (4)

Since then, the Hungarian government has been willing to tinker around with the numbers given that there has been no takers, for instance lowering the licensing fees for smaller operators, but has yet to come up with a solution that anyone is really interested in.

Their taxation rate, which totals 22.5%, hasn’t been that well received either, and what they probably need to realize is that overall, this isn’t a huge market, and the way market forces work if you don’t have an offer that the market wants, and the operation does not end up being put into place, then you don’t collect any tax revenue from it at all, so it’s likely that they will have to back off on this part of it as well for this scheme to have much of a chance of seeing the light of day.

Even in France, where players complain of excessively high tax rates, the tax rates on revenues is considerably less, even though they do have a high corporate tax rate on gaming companies. So even France goes much lighter on revenues than this, and Hungary’s rate isn’t just a little high it’s way out there. So like they taxed away most of the live poker they once had there, they are essentially looking to do the same thing with online poker, only this isn’t even getting off the ground in the first place.

 

The Current Online Poker Scene in Hungary

Current online gambling legislation in Hungary also gives the country the power to seek to block ISP’s of non-regulated gambling sites, and the Hungarian government hasn’t been shy to attempt to do so.

Many online poker sites have already been blacklisted so to speak, including sites like PokerStars, PartyPoker, Bettson, and others, but the list does not include all of the major online poker players, at least at present anyway.

Several of the poker sites that have been blocked are claiming that since they are licensed in the EU, and Hungary is a member of the EU, then the EU license is sufficient for them to operate in Hungary and no Hungarian license is required. (5)

In any event, blocking websites hasn’t been shown to be particularly effective in other locations and there’s no real reason to believe it will be in Hungary either, although it is true that it does serve to limit play at least somewhat. For instance, this does tend to lead to less new players entering the market, but does nothing to block existing players, and even new players can find ways to download the software by using some fairly easy workarounds.

No one is even that sure what a Hungarian regulated poker market would even look like, for instance whether it would allow players to compete on poker sites’ main sites and allow them to play against players from other countries, as much more sophisticated regulatory schemes now allow, but Hungary’s framework is very lacking in sophistication and while they have worked on this for a while already, there is much more work left to do in order to ever see it being accepted.

As the government of Hungary has learned, you can’t just implement online schemes merely by decree as you can with land based gambling, and it has to be able to compete with what’s already out there, and so far it hasn’t.

In the meantime, Hungarian online poker players simply are playing on as usual at their favorite online poker sites, and none of this has affected them, and we’re a ways off at best from any changes on this scene.

 

References:

(1) Szerencsejatek Zrt

(2) Poker Rooms in Hungary

(3) Online Gambling Sites in Hungary

(4) Hungary Passes Online Gaming Laws

(5) Several Pokerstars Domains Blacklisted in Hungary

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